«Researchers have endeavored to increase understanding of the relationships between investments in information systems (IS), competitive advantage, ...»
The Grounded Theory method allowed investigation of a complex phenomenon and a rich and in-depth perspective on the categories and concepts that explain the role of information systems in conceiving, enacting, and executing competitive actions toward firm performance. However, a further step can be taken in understanding of the role of information systems in facilitating and enabling a collective and interactive decisionmaking process by examining the managerial collectives at each stage of the competitive dynamics process and the discourse between the managers at a given stage in their efforts toward conceiving, enacting, and executing competitive actions toward firm performance.
within complex systems such as organizations where existing research methods are incapable of handling the volume and multifariousness of communication data. They describe Browning and Beyer‘s (1998) grounded theory investigation of the development of standards within an organization, where the authors analyzed tremendous volumes of qualitative data in an effort to examine communication patterns. While Corman et al.
(2002) believe that the Browning and Beyer study made valuable contributions to the study of communication as derived through grounded theory, the study was limited by the methodology. While grounded theory was able to identify specific insights and linkages, it was not up to the task of handling the volumes of data in such a way as to identify specific patterns and microcosms of communication throughout the organization.
Corman et al. (2002) point out that this situation is not unique to the Browning and Beyer study. They suggest that Barley‘s (1986) qualitative study of technological change in two hospitals could be significantly strengthened by a comprehensive examination of discourse patterns inherent in these organizations. ―Detecting and describing complex patterns spread out over a vast field of discourse may well be too difficult a task for informants, or for human analysis of accounts and residual texts‖ (Corman et al., 2002; p. 161). Ellis (1999) suggests that only by studying micro-practices of social discourse can we come to understand collective level social constructions.
A second study in this dissertation extends the Grounded Theory findings in Study I by incorporating a Social Network Analysis of the managerial collectives at each stage of the competitive dynamics process and a Centering Resonance Analysis of
of furthering understanding of the role of information systems in conceiving, enacting and executing competitive actions toward enhancing relative firm performance.
Of interest in Study II is the issue of how managers use social computing and communications technology in the context of conceiving, enacting, and executing competitive actions or responses which will impact relative firm performance. Study II addresses the following research question: How do managers in a dominant firm utilize intrafirm social computing networks and communications technologies in conceiving, enacting and executing competitive actions and responses to improve relative firm performance? Answering this research question begins with a review of relevant literature.
6.1. Literature Review To lay the foundation in understanding the phenomenon in the context of social networks built around social computing and communications technologies, several streams of research are examined and synthesized. Figure 2 provides a graphical depiction of the various literatures reviewed to address the research question.
In the context of the research question in Study II of this dissertation, the following streams of research are considered relevant: a brief reintroduction to information systems and firm performance (Bharadwaj, 2000; Chi, Holsapple & Srinivasan, 2007a, 2007b; Mithas et al. 2004; Sambamurthy et al. 2003); a brief reintroduction to competitive dynamics and firm performance (Chen & Hambrick, 1995;
Chen & Miller, 1994; Derfus, Maggitti, Grimm & Smith, 2008; Ferrier, 2001; Smith, Grimm, Gannon & Chen,1991; Young, Smith, & Grimm,1996); the awarenessmotivation-capability perspective in competitive dynamics (Chen, 1996; Chen, Su & Tsai, 2007; Ferrier, 2001); social computing (Friedman & Kahn, 1994; Parameswaran &
theory (Barnes, 1954; Breiger, 2004; Burt, 1976; 1992; Borgatti & Cross, 2003;
Granovetter, 1973); information and knowledge acquisition and sharing (Borgatti & Cross, 2003; Burt, 1992; Floyd & Wooldridge, 1999; Granovetter, 1973; Hatala & Lutta, 2009; Haythornthwaite, 1996; Larson, Gargis & Bauman, 2004; Moberg, Cutler, Gross & Speh, 2002; Rogers, 1986); and, organizational memory and learning (Anand, Manz, & Glick, 1998; Berthon, Pitt & Ewing, 2001; Stein & Zwass, 1995; Tsai, 2001; Walsh & Ungson, 1991) and, distributed cognition (Boland, Tenkasi, & Te'eni, 1994; Elsbach, Barr & Hargadon, 2005; Flor & Hutchins, 1991; Hollan, Hutchins, & Kirsch, 2000;
Hutchins, 1991; Kaplan, 2008; Walsh, 1995).
6.1.1. Information Systems and Firm Performance. Information systems research has sought to increase understanding of the relationships between investments in information systems (IS), competitive advantage and firm performance (Chi, Holsapple & Srinivasan, 2007). However, most current researchers, refuting early studies (i.e., Ives & Learmoth, 1984), agree that competitive advantage is difficult to achieve based upon the acquisition of technology alone (Carr, 2003; Wade & Hulland, 2004). These studies have examined information systems, competitive advantage and firm performance through various theoretical lenses, such as the resource-based view of the firm (Barua et al. 2004; Bharadwaj, 2000; Mithas et al. 2004; Sambamurthy et al. 2003), the knowledgebased view of the firm (Alavi & Leidner, 2001; Grant, 1996; Kearns & Sabherwal, 2007), and the concept of fit, deriving from information processing theory (Gattiker & Goodhue, 2004; Kim et al., 2006; Premkumar et al., 2005; Umanath, 2003).
information systems research, ranging from IT capabilities to IT skills to IT assets, creating a difficult foundation from which to build theories and research (Wade & Hulland, 2004). Furthermore, as previously suggested, the resource-based view is relatively silent when it comes to firms‘ competitive dynamics, which signifies a noteworthy gap in current research, given that Porter (1980) suggests that the very reason firms engage in competitive dynamics is to gain competitive advantage.
Grant (1996) suggests that one of the very reasons that firms exist is to create, share and integrate knowledge. The knowledge-based view of the firm suggests that firms achieve competitive advantage from IS capabilities and information and knowledge resources that are embedded and integrated within organizational structures and routines.
Grant (1996) suggests that firm-specific knowledge provides a resource that is inimitable, rare, valuable, socially complex within the organizational context, and heterogeneously dispersed across firms. The ability of a firm to capitalize upon its knowledge-based resources is central to the firm‘s ability to compete (Nonaka, 1994). Similar to current utilization of the resource-based view, studies utilizing the knowledge-base view have largely ignored the context of firms‘ competitive dynamics. Provided that a firm‘s competitive actions bring competitive advantage (Porter, 1989; Smith et al., 1989), this is a notable gap in current literature, given the acknowledgement of the importance of the role of information systems in the management of knowledge resources and that knowledge has been expounded as the most ―strategically significant resource of the firm‖ (Alavi & Leidner, 2001).
firm performance and competitive advantage by evaluating the effectiveness of some derivative of the concept of fit (Francalanci & Galal, 1998; Gattiker & Goodhue, 2004;
Kim et al., 2006; Premkumar et al., 2005; Umanath, 2003). This stream of research suggests it is the fit between organizational needs and capabilities that can bring competitive advantage and improvements in firm performance. Again, this stream of research has tended to look broadly at competitive advantage and has not examined the role of information systems in firms‘ specific competitive actions and responses toward firm performance.
6.1.2. Competitive Dynamics and Firm Performance. Schumpeter‘s (1950) theory of ―creative destruction‖ describes firms‘ aggressive ―…race to get or to keep ahead of one another‖ (Kirzner, 1973: 20). Building upon Schumpter‘s view of competitive interaction, much of the research in the competitive dynamics sector of strategic management has examined the processes by which firms compete. Foci in research in the competitive dynamics stream have been diverse, ranging from competitive actions and response (Chen et al., 1992; Chen & McMillan, 1992; Ferrier et al., 1999;
McMillan et al., 1985; Smith et al., 1991; Smith et al., 1992) to repertoires of actions (Miller & Chen, 1996) and sequences of actions (Ferrier, 2001).
Competitive dynamics researchers have gone beyond merely examining marketplace interaction, however, to examine the impact of competitive dynamics upon firm performance. Chen and Hambrick (1995) have examined how competitive behavior for small firms differs from large firms, and firm size accounts for differences in impacts
firm performance. Derfus, Maggitti, Grimm and Smith (2008) examined the relationships between focal firm actions, rival firm actions, and focal firm performance.
Ferrier (2001) looked at the characteristics of sequences of actions and resulting impacts upon firm performance Smith, Grimm, Gannon and Chen (1991) linked variations in response to firm performance. Finally, Young, Smith, and Grimm (1996) looked at firm level competitive activity and impacts upon firm performance.
While the competitive dynamics literature has contributed to understanding of the relationship between competitive activity and relative firm performance, this stream of research does have its limitations. First, the literature has taken a largely dyadic focus without taking into account the organizational or social context. Secondly, most studies have been concentrated within the U.S. airline industry and relied upon the use of secondary data. While the competitive nature of the airline industry lends itself well to a study in competitive dynamics, concentrating research so heavily within one industry is likely to affect the generalizability of results. Third, most studies have focused on discrete outcomes, without considering how or why competitive actions or responses were carried out (Ketchen et al., 2004). Fourth, most studies have been conducted in the positivist tradition. Purely cross-sectional studies conducted largely through the use of secondary data cannot provide complex insights. Finally, few studies have examined the role of information systems in the context of firms‘ competitive actions and responses to improve relative firm performance.
Motivation, and Capability have been identified in the competitive dynamics literature as the three essential factors underlying organizational competitive action (Chen, 1996;
Chen et al., 2007; Smith, Ferrier & Ndofor, 2001). The Awareness, Motivation, Capability perspective suggests that the actions firms tend to take largely depend upon their level of awareness of other firms in a given industry. In consideration of undertaking an action, firms tend to evaluate the potential responses to that action by other firms in an industry. Firms tend to respond to the actions of competitors if they are aware that the action has occurred and if they have the motivation and capability to respond. Awareness is especially noteworthy in this perspective, as awareness determines the extent to which decision-makers understand key competitors and their actions within the competitive environment, and the extent to which decision-makers understand consequences of actions and responses (Baum & Korn, 1999; Chen, 1996;
Ferrier, 2001). Motivation occurs if there are appropriate incentives for response (Ferrier, 2001) and response is expected to yield desired benefits (Chen, 1996; Vroom, 1964). Given the presence of Awareness and Motivation, there must also be the Capability for response. Capability is generally defined as a firm having adequate levels of resources necessary for desired response (Chen, 1996; Ferrier, 2001).
Given the focus of this research endeavor, the awareness-motivation-capability perspective is well-suited toward the current investigation. Thus, this study will employ the AMC perspective a priori as a foundation toward examining the focal firm‘s
through social computing. Furthermore:
Researchers should explore the nuance and complexity of the interrelationships…under various industry conditions, and extend this promising perspective to develop a predictive theory not only of competitive action, but of organizational action in general. (Chen et al., 2007, p. 116) Existing research, being largely cross-sectional and reliant upon secondary data is not well suited towards such complex examinations. A grounded theoretical analysis of managerial interpretations (Dutton, Fahey & Narayanan, 1983; Eisenhardt, 1989) of competitive actions and a centering resonance analysis (Brandes & Corman, 2002;
Corman, Kuhn, McPhee, & Dooley, 2002; Dooley, Corman & McPhee, 2002; McPhee, Corman, & Dooley, 2002) of intrafirm social networks (Floyd & Wooldridge, 1999; Tsai, 2001; Smith & McKeen, 2007) will be used in this research to develop a rich understanding of the role of social computing networks in influencing awarenessmotivation-capability in the context of competitive dynamics and firm performance.
6.1.4. Social Computing. As early as 1994, information systems researchers were interested in the concept of social computing (Schuler, 1994), or the use of information technology in the formation of social structures (Friedman & Kahn, 1994;